Category winners and losers in 2022

The overview: 2022 was a tricky year for retailers to navigate, as rising inflation forced shoppers to make tough spending decisions. While consumer spending on the whole defied pundits’ gloomy projections, some categories outperformed others.

The winners: Unsurprisingly, some of the biggest category winners in 2022 were essentials like food and grocery and pet products. But others, like beauty and travel, speak to the spending power that many households continue to wield.

• Food and beverage sales rose 12.3% year-over-year (YoY), per our US retail sales forecast, driven mostly by inflation but also by a significant number of shoppers trading up to premium products and brands.
• Sales of pet products increased 15.7% as a boom in pet ownership during the pandemic drove higher demand for food, toys, and petcare.
• The health and personal care, cosmetics and beauty, and fragrance categories all saw double-digit growth in 2022 as consumers largely returned to in-person events and looked for relatively affordable ways to indulge.
• And consumers’ pent-up desires to eat out and travel came out in full force this year. Except for a small dip in July, restaurant spending rose steadily throughout 2022, although some of those gains came from inflation. Travel spending has also stayed strong: In November, consumers spent 16.2% more YoY on airfare, and 41.6% more YoY on lodging, per Mastercard SpendingPulse.

The losers: Discretionary categories were hit hardest as they struggled to lap a year of relatively strong growth and consumers’ buying power diminished.

• Jewelry sales fell 14.3% YoY, with blockbuster growth in 2021 proving to be a difficult act to follow as macroeconomic pressures weighed on consumer spending.
• Computer and consumer electronics grew by an anemic 1.8% YoY, well below November’s 7.1% inflation rate, after shoppers stocked up during the first two years of the pandemic.
• Furniture and home accessories sales similarly failed to rise above inflation, growing by just 2.7%, as high interest rates caused more households to stay put and avoid big-ticket purchases.

The big takeaway: Even with inflation beginning to ease, these spending trends are likely to continue well into 2023 as consumers grow more cost-conscious.

This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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